Competition Act changes won’t have big impact on telecommunications industry

Proposed amendments to the Competition Act tabled in the House of Commons last month are positive, but won’t ultimately make too great an impact on the telecommunications industry, according to industry insiders. At first blush, the creation of administrative monetary penalties (AMPs) to punish market dominance abuses seems to add teeth to the act, but two industry sources are tepid on their effectiveness. One says work remains to be done to strengthen the Telecommunications Act, as well. Chris Taylor, an Ottawa-based lawyer, tells Network Letter that creating monetary penalties for abuses of market dominance should be seen as good news for the telecommunications industry. The creation of AMPs in the case of market dominance demonstrates that the remedies available to wronged companies under civil provisions were just not helpful enough, he says. Theoretically, the introduction of AMPs could have an effect on the telecommunications industry, but Taylor says a bigger impact would come from the creation of similar AMPs available under the Telecommunications Act. "That would have a much bigger effect because the regulator of the telecommunications sector could (impose AMPs)," he adds. "There wasn’t any penalty part to (the Telecommunications Act) to really hammer the person who had been abusing their position…It would be nice if that was recognized in the Telecommunications Act because the problem you face with respect to the Telecommunications Act – and people have made this point for many years – is that people do things, breach the act or a commission decision, and all the CRTC does, and frankly to some extent all it can do…is say ‘stop doing that’," Taylor explains. MTS Allstream senior VP of regulatory affairs Chris Peirce agrees with Taylor that putting an AMP provision for market dominance in the Competition Act is a good thing. "I think that the kind of iterative process of amendment to the Competition Act that has been underway for a couple of years now is slowly opening up those provisions to greater access, to my mind, to companies who might be the victim of anti-competitive behaviour in the marketplace. I think it’s a natural step, as were the amendments that opened up private access – the access of private parties to the tribunal," he explains. Amendments not to change too much in telecom But Peirce believes proposed amendments to the act won’t be too broadly felt. "In a deregulated world and a deregulated pricing environment, you could have someone acting in an anticompetitive way to bring the Competition Act into play. But, if you think about the lag involved in a competitor making complaints to the CRTC, (compared) with the Competition Bureau, I think the experience has been similar on the few occasions that any competitor would have gone or complained to the Competition Bureau. So it would be a pretty murky path for a competitors in telecommunications at this point to see the Competition Bureau as a realistic remedy to behaviour in the marketplace that needed sanctions," he tells NL. "I think there are telecommunications companies, we are an example, that have pondered utilizing the Competition Act provisions in the past, but it’s an unwieldy beast at this point in the context of the telecommunications," he says, adding that the CRTC does have powers to levy fines, but has been notoriously reticent to do so. Citing previous Bell Canada activities Peirce says: "If you think about the 200 or so Bell Nexxia contracts that were found to be entered into improperly, there’s not been any sort of sanction in that type of behaviour levied against Bell Canada. In fact, they continue to offer service under most if not all of those impugned arrangements." He refers to a 2002 CRTC ruling (Telecom Decision 2002-76; NL, Dec. 16/02).

Competition Act changes won’t have big impact on telecommunications industry

News | December 8, 2004

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